Mayor's Jewelers, Inc. v. State of Cal. Public Employees' Retirement System, 96-0879

• Citation: 685 So.2d 904
• Decision Date: 11 December 1996
• Docket Number: No. 96-0879,96-0879
• Parties: 21 Fla. L. Weekly D2608 MAYOR'S JEWELERS, INC., d/b/a MAYOR'S JEWELERS, Appellant, v. STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM, Appellee.
• Court: Florida District Court of Appeals

Page 904

685 So.2d 904

21 Fla. L. Weekly D2608

MAYOR'S JEWELERS, INC., d/b/a MAYOR'S JEWELERS, Appellant, v. STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM, Appellee.

No. 96-0879.

District Court of Appeal of Florida Fourth District.

Dec. 11, 1996.

Suzanne H. Youmans and Richard L. Allen of Engels, Pertnoy, Solowsky & Allen, P.A., Miami, for appellant.

John H. Pelzer and Brian S. McHugh of Ruden, McClosky, Smith, Schuster & Russell, P.A., Fort Lauderdale, for appellee.

KLEIN, Judge.

Appellant, a tenant under a commercial lease, notified appellee, its landlord, that it intended to break its lease in the mall known as Pompano Square. The landlord filed suit for a temporary injunction to restrain the tenant from vacating the store and to compel specific performance of the lease. The trial court granted a temporary injunction, which the tenant appeals. We reverse.

The provision of the lease on which the landlord relies to support its theory that the tenant can be enjoined from breaking its lease is as follows:

OPERATION OF BUSINESS

A. Open for Business. TENANT agrees to occupy and open the PREMISES for business, fully fixtured, stocked and staffed, and thereafter to continuously conduct its business in one hundred percent (100%) of the space within the PREMISES under the name designated, on all business days of the calendar year as described herein. TENANT recognizes that the covenants of TENANT in this ARTICLE 5 are a material consideration to LANDLORD hereunder in order that TENANT might produce the maximum gross sales possible from the PREMISES during the lease term and the continued operation of a full service regional retail development be assured.

This is a case of first impression in Florida; however, almost every other court confronted with this issue has denied injunctive relief requiring a tenant to specifically perform a lease. ¹ Like the present case, these cases involve malls or shopping centers with leases under which rent is wholly or partially dependant on the tenants' volume of business. Courts have declined to require continuation of these leases primarily for two reasons.

Most of the cases reason that the injunction would involve the court in having to supervise the future performance, thus putting the court "in the business of managing a shopping center." New Park Forest Assocs. II v. Rogers Enters., Inc., 195 Ill.App.3d 757, 142 Ill.Dec. 474, 479, 552 N.E.2d 1215, 1220 (1 Dist.1990); see also 8600 Assocs. v. Wearguard Corp., 737 F.Supp. 44 (E.D.Mich.1990); Lorch, Inc. v. Bessemer Mall Shopping Ctr., Inc., 294 Ala. 17, 310 So.2d 872, 876 (Ala.1975). This general principle limiting injunctions is part of our jurisprudence. Calumet Co. v. Oil City Corp., 114 Fla. 531, 154 So. 141, 142 (Fla.1934) (denying specific performance of an oil well drilling contract because of the "inability of the court to undertake supervision of performance of such a contract"). See also Collins v. Pic-Town Water Works, Inc., 166 So.2d 760 (Fla. 2d DCA 1964).

Some of the courts have also denied these injunctions on the ground that the damages are purely economic and there is therefore an adequate remedy at law. 8600 Assocs.; Sizeler Property; see also Center Dev. Venture v. Kinney Shoe Corp., 757 F.Supp. 34 (E.D.Wis.1991). Our conclusion that injunctive relief should be denied under these facts, because it would require supervision by the court, makes it unnecessary for us to decide whether there was an adequate remedy at law in this case.

The landlord relies on two cases to support its argument that injunctive relief is available. In one of them, Lincoln Tower Corp. v. Richter's Jewelry Co., 152 Fla. 542, 12 So.2d 452 (Fla.1943), each tenant had agreed to remain open for business all year round except for holidays. The Florida Supreme Court decided that the tenant could be enjoined from breaching the lease. The case has been cited by landlords as standing for authority that a tenant can be enjoined from breaking a lease and vacating; however, we cannot agree with that broad interpretation. We construe that opinion as standing for the proposition that a tenant who intends to remain a tenant can be enjoined to remain open for business all year round as required by the lease. As our supreme court explained, the landlord was:

[D]oubtless actuated by a desire to protect and maintain the character of all the property leased to the appellee and its neighbors. By requiring all lessees to be open for trade continuously the unit fell in the category of a year-round business area as distinguished from a seasonal one. It was to its advantage also to require compliance with the restriction against closing because, in some of the leases, the income to the landlord depended to a stated degree on the amount of sales made by the tenants. Another purpose in enforcing the covenant was to assure to all of the tenants the advantage of continued business activity because a client or customer of any place of business in the locality was a potential client or customer, at least, of all the others. It was, therefore, important to the landlord, as well as the tenants, that the condition in the leases be observed by each for the benefit of all. The interests of the landlord and its tenants were in this situation inextricably bound together.

Id. 12 So.2d at 453. There is nothing in the opinion in Lincoln Tower which indicates that the tenant wanted to vacate the premises. The decision does not, therefore, in our opinion, authorize an injunction requiring the continuation of a lease where the tenant intends to terminate and vacate. At least one other court has distinguished Lincoln Tower on that same basis. See New Park Forest, 142 Ill.Dec. 474, 552 N.E.2d at 1218.

The only other case on point relied on by the landlord is Massachusetts Mutual Life Insurance Co. v. Associated Dry Goods Corp., 786 F.Supp. 1403 (N.D.Ind.1992). In that case, the tenant was a department store occupying one-sixth of the mall's space. The court entered a temporary injunction requiring the anchor tenant to stay there until there was a trial on whether a permanent injunction would issue, but required, as a condition, that the landlord post a security bond in the amount of $1,000,000 to compensate the tenant if a permanent injunction were denied. The court also recognized that the relief it was granting was unprecedented. Id. at 1428-30. We decline to follow that case and adopt the majority view that this type of breach of contract is not susceptible to the remedy of an injunction requiring specific performance.

We therefore reverse the temporary injunction.

STONE, J., concurs.

FARMER, J., concurs specially with opinion.

FARMER, Judge, specially concurring.

While I join in the reversal, I do so for entirely different reasons than those expressed by the majority.

If I understand their analysis correctly, they have concluded that the landlord has shown irreparable harm by reason of the inadequacy of money damages. That, of course, leaves open the possibility that the landlord might otherwise be entitled to a mandatory injunction requiring the tenant to specifically perform the lease. They have further concluded, however, that judicial considerations of the public interest--i.e., that courts would be required ultimately to take over the management of the demised premises in order to enforce the injunction--preclude such relief. I cannot agree that an injunction would be proper under any set of facts in this case.

Article 5 of the lease requires Mayors, the tenant, to:

"occupy and open for business, fully fixtured, stocked and staffed, and thereafter to conduct its business in ... 100% of the space within the PREMISES under the name designated, on all business days of the calendar year...."

The parties describe this as a "continuous operations" clause. To explain the importance of the continuous operations clause, the lease states:

"TENANT recognizes that the covenants of TENANT in this ARTICLE 5 are a material consideration to LANDLORD hereunder in order that TENANT might produce the maximum gross sales possible from the PREMISES during the lease term and the continued operation of a full service regional retail development be assured." ²

At the same time, in article 20 of the same lease, the parties also agreed as follows:

Recognizing the difficulty or impossibility of determining LANDLORD's damages for loss of Percentage Rent anticipated from TENANT and or other tenant[s] or occupants of the Shopping Center or for loss of value in the Shopping Center because of diminished saleability, mortgageability, adverse publicity or appearance which may result from any one or more of the events hereinafter enumerated, LANDLORD and TENANT covenant and agree that in the event TENANT shall fail to take possession of, construct and thereafter open the PREMISES for business, fully fixtured, stocked and staffed on the Commencement Date, or shall vacate or abandon the PREMISES, or shall cease to operate TENANT's business within the PREMISES as required by Article 5 hereof, then and in any of such events, LANDLORD shall have the right to collect not only the Fixed Minimum Rent, Percentage Rent and Additional Rent reserved, but also the Percentage Rent paid or payable during the last full calendar year prior to the year in which such default occurs for the period during which any of the aforementioned events shall continue, prorated on a daily basis for each and every day during such period, such amount to constitute liquidated damages in lieu of any Percentage Rent that might have been earned by LANDLORD during such period. The parties hereto agree that it will be impractical or extremely difficult to ascertain the actual damages suffered by LANDLORD in the event of such default by TENANT, and therefore agree that the sum stated as liquidated damages for the above default by TENANT constitutes fair and adequate consideration to LANDLORD by reason of...